The rebound in stocks after a low point on Wednesday last week has taken many US indices to slight new highs, leading to a lot of breathless commentary about the ‘continuing bull market’. Yes, prices are pushing higher and the daily-scale top extensions that occurred late in December have now ‘timed-out’ but there are still weekly-scale top signals to consider. US equities first made a weekly extension 3 weeks ago and now the QQQ Nasdaq instrument has made another:
A top extension is rarely enough to warrant an immediate new short position, so we wait a bit. The largest turn cluster of this month is due on Friday the 17th, in three days time, as you can see on the front page. That may provide an opportunity, so we sit still for now. Don’t get carried away here by bullishness though – another leg up is just possible but a setback is more likely. Any rally to new highs will almost certainly fail.
Elsewhere, commodity indices have dipped sharply, led by energy and coffee. This is far from universal as some crop commodities remain strong. There is some support in the indices just below here, so we would not ‘press’ on the short side here and would look to take some or all profits on any further weakness:
Cotton has made a new top extension:
As usual, we would prefer to see more time pass before recommending a short sale on the basis of this one signal, but these crop markets can turn fast, so start selling now!
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com
